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stich3 [128]
2 years ago
13

The White Corporation has a capital structure of 60 percent common equity, 10 percent preferred stock, and 30 percent debt. This

capital structure is believed to be optimal. To finance expansion plans over the coming year, the firm expects to have $40 million in retained earnings available. The cost of retained earnings is 18 percent. Additional common equity can be obtained by selling new common stock at a cost of 19.6 percent. Preferred stock can be sold at a cost of 15 percent. $25 million in secured bonds can be sold at a pretax cost of 14 percent. Beyond $25 million, the firm would have to sell unsecured bonds (debentures) at a pretax cost of 15 percent. The firm's marginal tax rate is 40 percent. What is the firm's highest weighted cost of capital?
Business
1 answer:
Elan Coil [88]2 years ago
4 0

Answer:

with only one chain and one pendant per necklace.write an expression that shows how much it will cost ronnie to

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The following amounts were taken from the financial statements of Ando Company: 2017 2016 Total assets $800,000 $1,000,000 Net s
aleksandr82 [10.1K]

Answer:

35 times

Explanation:

The price-earnings ratio is the financial ratio that compares the market price of a share with its earnings in order to determine whether the share gives earnings that makes it a good buy.

Price-earnings ratio=market price per share/earnings per share

market price per share for 2017 is $42

earnings per share=net income-dividends/average common stock outstanding

net income is $108,000

dividends is nil

average number of common stock is 90,000

earnings per share=$108,000-$0/90,000=$1.2

price earnings ratio=$42/$1.2=35 times

6 0
3 years ago
Explain what business you would start today if given the opportunity. Why this business?
Sedbober [7]

Answer I will start a You Tube job cause it easy not that easy but it much better then having a job with work and cause I failing school so I can't do a job that is math science social studies and that and I don't have to go drive to mine job when I can go do mine job is home and mostly cause I can do something I like in you tube like games

7 0
3 years ago
Carlton files a petition in bankruptcy. One of the goals of bankruptcy law with respect to a debtor is to:____.
german

Answer:

<em>Carlton files a petition in bankruptcy. One of the goals of bankruptcy law with respect to a debtor is </em><em>to </em><em>provide a fresh start, free from creditors' claims </em>

8 0
2 years ago
Only one commercial bank in the banking system has an excess reserve, and its excess reserve is $400,000. This bank makes a new
Zarrin [17]

Answer:

money supply will increase by 2,400,000

Explanation:

the expansion f the money supply will be:

the money multiplier will be:

1/reserve ratio = 1/0.125 = 8

300,000 x 8 = 2,400,000

The reasoning for the multiplier effect is the following:

once the money is received, it will be used, and the person who receive the cash will deposit their proceeds.

This amount, can generate a new loan for, the remainder after subtracting the required reserve.

300,000 - 12.5% = 262,500

And this, once used will also end in a deposit. This opens the posibility for another loan, after reducing the reserve

262,500 - 12.5% = 229,687.5‬

This can be reapeat again and again and the limit for this is the formula state above:

multiplier effect = 1/reserve ratio

5 0
3 years ago
a mature manufacturing firm. The company just paid a dividend of $8.65, but management expects to reduce the payout by 5 percent
-BARSIC- [3]

Answer:

$48.34%

Explanation:

Data provided in the question

Growth rate = 5%

Required return = 12%

Dividend = $8.65

Based on the above information,

The computation of the current price is shown below:-

Current Price = Dividend × (1 + Growth Rate) ÷ (Required Return - Growth Rate)

= $8.65 × (1 + (-5%)) ÷ (12% - (-5%))

= $48.34%

Therefore for computing the current price we simply applied the above formula.

4 0
3 years ago
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